Arizona Revised Statutes

Ariz. Rev. Stat. § 42-1302 (2026)

Tax incentives; conditions

✓ current as of May 2026

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42-1302. Tax incentives; conditions

A. A prime contractor may qualify for an exemption from transaction privilege tax with respect to activities in a military reuse zone as provided, and subject to the terms and conditions prescribed, by section 42-5075, subsection B, paragraph 4.

B. Taxable property in a military reuse zone that is devoted to providing aviation or aerospace services or to manufacturing, assembling or fabricating aviation or aerospace products qualifies for assessment as class six property as provided, and subject to the terms and conditions prescribed, by sections 42-12006 and 42-15006.

C. To qualify for a tax incentive described in subsection A or B of this section, the taxpayer shall provide to the department information relating to the amount of tax benefits the taxpayer receives each year for each year in which the taxpayer claims the incentives on forms prescribed by the department. If the taxpayer fails to provide the required information, the department shall immediately revoke the taxpayer's certification of eligibility.

D. Taxpayers who qualify for tax incentives under subsection B of this section shall be certified by the department as eligible for a five-year period, subject to termination in the event of changed circumstances rendering the taxpayer no longer eligible.

Notes of Decisions

Cited in 9 cases, 1974–2008 · leading case: Arizona Dep't of Revenue v. Action Marine, Inc., 181 P.3d 188 (Ariz. 2008).

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Arizona Dep't of Revenue v. Action Marine, Inc., 181 P.3d 188 (Ariz. 2008). · cites it 4× “[8] Before 1992, the statute now codified at § 42-5002(A)(1) read: "In no event shall the person upon whom the tax is imposed, when an added charge is made to cover the [TPT] .”

Arizona Dep't of Revenue v. Canyoneers, Inc., 23 P.3d 684 (Ariz. Ct. App. 2001). · cites it 3× “section 42-1302(A)(1) to provide: "A person who imposes an added charge to cover the tax levied by this article or which is identified as being imposed to cover transaction privilege tax shall not remit less than the amount so collected to the department.”

Carriage Trade Mgmt. Corp. v. Arizona State Tax Comm'n, 557 P.2d 183 (Ariz. Ct. App. 1976). · cites it 4× “Carriage Trade is now being taxed in this case on the privilege of being able to promote and advertise for the various establishments. Its gross receipts are determined from the indirect payment of the membership fees by patrons who enroll in the program, i.”

Valencia Energy Co. v. Arizona Dep't of Revenue, 872 P.2d 206 (Ariz. T.C. 1994). · cites it 5× “Freight Cost Exemption from Taxation As a final argument Valencia claims that if its entire business proceeds are subject to tax, it is entitled to an exemption under A.R.S. § 42-1302 for certain freight costs.”

Watkins Cigarette Serv., Inc. v. Arizona State Tax Comm'n, 526 P.2d 708 (Ariz. 1974). · cites it 6× “It is true that the legislature has provided concerning the transaction privilege tax: “For the purpose of this article the total amount of gross income, gross receipts or gross proceeds of sales shall be deemed to be the amount received, exclusive of the tax imposed by this…”

Watkins Cigarette Serv., Inc. v. Arizona State Tax Comm'n, 517 P.2d 1089 (Ariz. Ct. App. 1974). · cites it 2× “) (1939) (now A.R.S. § 42-1302), thus nullifying the specific holding of the Quebedeaux case.”

Valencia Energy Co. v. Arizona Dep't of Revenue, 938 P.2d 474 (Ariz. Ct. App. 1996). “section 42-1302(A)(2) excludes from the gross proceeds of a sale of a retail good: Freight costs billed to and collected from a purchaser by a retailer for tangible personal property which, upon order of the retailer, is shipped directly from a manufacturer or wholesaler to the…”

Ador v. Action marine/randall (Ariz. 2008). · cites it 2× “” A.R.S. § 42-1302(A)(1) (1991) (emphasis added).”

ADVO Sys., Inc. v. City of Phoenix, 942 P.2d 1187 (Ariz. Ct. App. 1997). · cites it 2× “2d 183 (1976) in an analogous context: The transaction privilege tax is levied upon the person who is exercising the privilege of engaging in an enumerated busi-ness____ A.R.S. § 42-1302 allows the person or business to pass the tax levied upon them to their customers as any…”

— Ariz. Rev. Stat. § 42-1302(A)(1) — 3 cases

Arizona Dep't of Revenue v. Action Marine, Inc., 181 P.3d 188 (Ariz. 2008). “[8] Before 1992, the statute now codified at § 42-5002(A)(1) read: "In no event shall the person upon whom the tax is imposed, when an added charge is made to cover the [TPT] .”

Arizona Dep't of Revenue v. Canyoneers, Inc., 23 P.3d 684 (Ariz. Ct. App. 2001). “section 42-1302(A)(1) to provide: "A person who imposes an added charge to cover the tax levied by this article or which is identified as being imposed to cover transaction privilege tax shall not remit less than the amount so collected to the department.”

Ador v. Action marine/randall (Ariz. 2008). “” A.R.S. § 42-1302(A)(1) (1991) (emphasis added).”

— Ariz. Rev. Stat. § 42-1302(A)(1)(1991) — 1 case

— Ariz. Rev. Stat. § 42-1302(A)(2) — 2 cases

Valencia Energy Co. v. Arizona Dep't of Revenue, 872 P.2d 206 (Ariz. T.C. 1994). “Freight Cost Exemption from Taxation As a final argument Valencia claims that if its entire business proceeds are subject to tax, it is entitled to an exemption under A.R.S. § 42-1302 for certain freight costs.”

— Ariz. Rev. Stat. § 42-1302(A)(l) — 1 case

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